It is essential to ensure that business-supporting internal applications supporting inventory, shipping, invoicing and product forecast that comprise the supply chain perform flawlessly.

After all, this drives in-store product availability, the ability to quickly respond to market needs and the creation of lean and profitable business operations.

While it’s easy for retailers to focus too heavily on consumer-facing web sites, it’s the core internal applications that are the lifeblood of a successful retail operation. The supply chain has long played a critical role in retail success, even when feeding brick-and-mortar stores alone was the goal. Now the supply chain is under more pressure than ever as it is called upon to satisfy multichannel requirements.

The numerous applications powering the supply chain are ultimately what make it possible — or impossible — for retailers to satisfy customer demands, yet still remain profitable. It’s no wonder the retail supply chain is the focus of renewed investment. In the RIS Retail Technology Study 2012, real-time inventory visibility and distributed order management ranked as two of the highest priorities for upgrades.

That said, retailers can’t afford to deliver an outstanding experience at any cost. The reality is that profit margins remain thin in the world of retail. Retailers need to focus on optimally linking supply chain performance to its impact on customer satisfaction and costs.

Essentially, retailers need to excel in three key areas to achieve their goals:
• Operational effectiveness
• Financial effectiveness
• Customer fulfilment effectiveness

The causes of poor application performance
Today, applications are delivered via a combination of hardware, software and services known as the application delivery chain.

Everything in this chain must work together without fail to ensure supply chain continuity. But the growing use of multi-tier architectures, virtualisation and other new technologies in the data centre makes it increasingly difficult for IT to ensure application availability and optimal performance. In fact, most application performance issues are discovered by end users. In other words, IT cannot quickly identify and isolate performance issues as they happen and, in turn, struggles to minimise the impact on the business.

Findings from a survey commissioned by Compuware shed further light on this issue. Though identifying, locating and resolving application performance issues is critical to uninterrupted business operations, 30 percent of respondents from large companies in the U.S. and Europe said they could not even determine which applications were experiencing performance problems.

Measuring application performance from the customer's perspective
Retail IT and operations teams design their supply chain processes from an outside-in view, understanding the elements of demand first.

This enables them to develop marketing and sales strategies to differentiate themselves from the competition and optimize value to consumers. IT can support this view by managing application performance from the same outside-in view. In other words, they need to focus on the end user’s experience of applications rather than on the technology itself as it is the quality of experience with the application that dictates efficiency and adoption.

Application performance monitoring is imperative
Most retail IT groups find it increasingly difficult to gain insight into — never mind, pinpoint — application performance issues that impact the end-user experience, the ultimate measure of an application’s effectiveness.

The traditional approach of monitoring servers, networking gear and other infrastructure elements is insufficient. If retailers can’t measure or even see an applications’ performance from the end-user’s perspective, they won’t be able to ensure uninterrupted workflows, efficient operations and a profitable supply chain. When application performance and availability problems arise — as they inevitably will — these retailers will be helpless in the face of lost productivity, rising costs and lower revenues.

To satisfy all end-user constituencies, IT needs to establish robust and broad application transaction performance monitoring for all applications and all users.

This is an extract from a Compuware APM whitepaper, Optimise Your Retail Supply Chain for Profitable Revenue. To see the paper in full, click here.